The FCA has unveiled a new regime for ESG rating providers in a bid to improve transparency and trust in the market, bringing providers under the auspices of the FCA for the first time.
From 29 June 2028, UK ESG rating providers will need FCA authorisation and the relevant permissions to continue their service, unless an exclusion applies.
The regulator has published the rules and perimeter guidance (PERG) following the decision by the Treasury to bring ESG ratings within scope of the FCA. The regime, which applies to firms or organisations providing ESG ratings and assessments, is to ensure reliability across the market.
Requirements cover transparency, governance, systems and controls, the management of conflicts of interest, and engagement with users of ESG ratings and rated entities, and are designed to be proportionate to firms' size.
Laura Dawes, director of authorisations and sustainable finance at the FCA, said: Trusted information is essential for well-functioning markets. These rules will help improve transparency and raise standards across the ESG ratings market while supporting competition, innovation and growth.
“Firms should check now whether they are in scope and start preparing for authorisation. We'll continue to provide practical support to help them prepare.”
ESG rating providers operating in the UK market have been told to apply for FCA authorisation from 24 June 2027. The FCA will provide webinars and access to its Pre-Application Support Service to help firms prepare.
The final rules take into account recommendations from IOSCO and follow the FCA’s consultation, which ran from 1 December 2025 to 31 March 2026.
